Zeti: Reserves an important buffer

PUTRAJAYA: The country's reserves, which declined by close to US$19 billion (RM68.5 billion) in 2014, previously criticised for being too large for a country of our size has worked as an important buffer in the wake of reversals in capital flows and depreciation of currency, said Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz (pix).
BNM's international reserves stood at US$116 billion as at end-December 2014 from the US$134.9 billion a year ago. The reserves position is sufficient to finance 8.4 months of retained imports and is 1.1 times the short-term external debt.
"Of course when we built up our reserves, we were criticised for accumulation of too much reserves which were far in excess of those required by a country of our size. Now, these reserves have become important and they have declined by US$18.9 billion, close to US$19 billion since 2014. This is what reserves are for. That's why we build up reserves," she said.
Zeti declined to reveal the optimal level of reserves for the country.